Some larger businesses, or councils, are eligible to provide their own Workers’ Compensation insurance, with the approval of the relevant state regulator.

We’ve outlined a few key considerations for your application of becoming a self-insured company/ organisation

Self-insurance is the term used to describe the business strategy whereby a company applies for a license to manage its own losses for workers’ compensation claims, as an alternative to paying premiums to a WorkCover Agent or insurer.

Meeting the eligibility criteria      

There are strict eligibility requirements, and regulation around management of the scheme differs between jurisdictions, and a formal application process required in order to be licenced as a self-insurer.

Prudential and legal requirements are quite strict to be awarded a license and the ability to administer claims. The most critical component being the financial capacity to fully fund future liabilities. The legislative requirements also vary between jurisdictions, covering the guidelines and safety management requirements.

Application fees and ongoing costs

Application fees and license fees differ in each jurisdiction

Restraints on company structure

Again, restraints on company structure varies across the different jurisdictions, as in some self-insurer licenses may be granted to an employer or a group self-insurer license may be granted to a holding company with wholly owned subsidiaries

Work health and safety requirements and auditing

The majority of jurisdictions also require an applicant for a self-insurance license to meet a minimum standard for work health and safety and rehabilitation. In determining the minimum standard required for work health and safety, most agencies require the employer to have in place a work health and safety management system or other arrangement. These are later audited.

Bank guarantees, prudential margins and excess of loss requirements

In addition to the above requirements employers are required to take out bank guarantees (or similar) to cover outstanding claims liabilities in addition to excess of loss insurance to cover catastrophic events.

Reporting requirements

Self- insured companies are obliged to comply with relevant workers’ compensation legislation to at least the same extent as premium-paying companies. There are control measures in place that self-insurers also need to adhere by in addition to periodic reporting that can be used to monitor performance.

Outsourcing of case management

Self- insurers can case-manage their employees workers compensation claims however there are a number of benefits in outsourcing claims management to a Third Party Administrator (TPA) such as Gallagher Bassett.

Benefits include:

• Faster, more focused claims management
• Lower overheads and reduced cost
• Immediate access to highly-trained specialist claims administrators
• Improving control over claims outcomes
• Safeguarding customer relationships and protecting brand reputation.

At GB, your tailored self-insurance plan will include:

• Bespoke claims management to support either a complete or partial outsource model
• Robust Governance Program to satisfy audit obligations, improve WHS initiatives and manage risk
• myGB client benefits that give you access to training, events and our social media analysis too
• Specialist consulting team ready to deploy for one-off-project work or as a labour hire solution
• Business insights through performance and system reporting capabilities 

Gallagher Bassett recommends a feasibility analysis with a qualified broker or actuary as a referral for self-insurance.

Our Self-insurance team have a demonstrated record of successfully implementing and supporting self-insured licensees’ claims in all jurisdictions, including Comcare. We have supported in excess of 20 licence implementations and variations in the past 10 years.

Our services improve return to work outcomes, reduce risk, control costs and ease our clients’ self-insurance administration burden. If you would like to know more, get in touch with GB and we’ll be able to review your eligibility and take you through your options.